The Window Store Will Have a Value of $139,000 If

question 45

Multiple Choice

The Window Store will have a value of $139,000 if the economy does well this coming year and a value of $121,000 if the economy does poorly.The probability of a good economy is 68 percent.The firm owes its bondholders $63,000.The firm will only operate for one more year.What is the value of this firm to its shareholders?

• A)$68,500
• B)$70,240
• C)$70,450
• D)$73,550
• E)$74,660